The economic analysis of minimum wage involves both normative and positive analysis.Consider the following consequences of a minimum wage: a.The minimum wage law causes unemployment.
b.A minimum wage law benefits some groups and hurts others.
c.In some cities such as San Francisco and New York, minimum wage laws are necessary for low-skilled workers to stay in the city.
d.The gains to winners of a minimum wage law should be valued more highly than the losses to losers because the latter primarily comprises businesses.
Which of the consequences above are positive statements and which are normative statements?
A)a, b, and c are positive statements and d is a normative statement.
B)a and b are positive statements, c and d are normative statement.
C)Only a is a positive statement, b, c and d are normative statements.
D)a and c are positive statements, b and d are normative statements.

Question

Quizplus · Accepted Answer

A and B are positive statements because they describe factual consequences of a minimum wage. C is a normative statement because it involves a value judgment about what is necessary for low-skilled workers. D is also a normative statement because it involves a value judgment about the relative importance of the gains and losses from a minimum wage law.

The Economic Analysis of Minimum Wage Involves Both Normative and Positive